So it is with considerable envy that I offer up this video about Europe’s fiscal/financial/monetary mess. Even though it lasts longer than nine minutes, I suspect it will keep everyone’s attention.

I’m not fully endorsing the contents of the video. Mr. McWilliams, for instance, probably has a confused IMF-type definition of austerity. But I definitely agree with him that policy is driven by the interests of the elite.

In any event, the production values of the video are first rate. Perhaps not in the same league as Part I and Part II of the Hayek v Keynes video set, but still remarkably well done.

4 Responses

Eventually, even the elite run out of other people’s money / productivity.
There just isn’t any way to maintain four to six times average per capita world prosperity on the flatter effort/reward curves that exist in Europe, where exceptionalism is harvested to insulate a majority from the consequences of mediocrity.

The widely held leftist ideal is that central planning, i.e. collective management and channeling of the economy into certain democratically coerced activities, will somehow compensate for the lower motivation (Paul Krugman is essentially the American high priest of this copy-Europe delusion). But that “hope” in central planning, only makes things worse, as economic efficiency decreases even further under the homogenizing coercion of central planning. Big innovations and efficient transformative industries, almost always come from surprising directions – directions that central planning cannot anticipate, but can obstruct through its coercive channeling of economic dynamism into the approved activities.

Thus, the western world is now in precipitous decline – gimmicks support the illusion – only to make the eventual onslaught of reality and fundamentals even more painful. How did something as bad as the first and second world happen in Europe? Didn’t people see it coming? No they did not. Watch how Europe walks one more time into the destruction of collectivism. No I do not mean war, something else perhaps. The details and manifestation of the decline are unpredictable, like predicting which bubbles will form where in a pot set to boil. But one thing is sure: A pot set on the stove will boil. Just the same way, Europe will not be able to maintain a 6-4x average worldwide per capita standard of living under the flat effort rewards it is currently riding on – and the even flatter ones coming up as intra-country social-democratic redistribution is augmented by an additional layer of cross-country social democratic solidarity, i.e. read, another layer of redistribution and central planning.

The Memphistoteles of collectivism never comes dressed up the same way – otherwise you’d recognize him – he assumes a new form every time. I’m just watching with interest to see how the fundamentals will eventually slap the old unmotivated continent into reality. America is following in the same path. All the policies of the Obama administration essentially amount to a comprehensive imitation of Europe. This is foolish beyond comprehension, akin to a country deciding to follow the soviets in the seventies, a couple of decades before their inevitable collapse.

But all words are in vain. The redistribution button is available at the polls and the voter lemming thinks that he’ll be the one to cleverly evade and get more than he pays into the various “care” packages he votes for – both as direct payment and as sub-par, perpetually compounding, dismal growth rate.

I’m awaiting to see how Darwinian natural selection will sort this out one more time….
Stay tuned.

It may be that the vid is “clever” but it’s also keynesian to the bone. In Europe, the intellectual battle is between “austerity” (not increasing government waste, more taxes) and “stimulus” (more waste, whatever taxes government can get away with). This fellow says that “austery doesn’t work”. He doesn’t seem to realize that the root origin of “public” debt is government spending, and that for the problem to be solved one has to strike at the root. That means at least not meeting the ever-increasing demands of bureaucrats and politicians. Cutting down (at least) the growth of government is just part of the correction. Which causes discontent and “social” pain. Which must be endured – by government, not by the taxpayer. Whatever morals are involved (see first vid), the author simply wants to avoid whatever readjustment – pain – is necessary. Why, Keynes showed us the way.

I agree with AA above that the video has a Keynesian bias. (Keynesian sensu lato.)
However that is not what most troubles me. What troubles me is that it does not even consider the only way to get Greece (and Europe in general) growing again: deregulation, including simplification of the tax code.
Whether Greece should submit to German demands, or choose default instead, is irrelevant by comparison. So are the gimmicks of the ECB.

BTW I gather from The Economist that the new unelected, technocratic Italian PM is keen on deregulation. Sometime, though not often, less democracy is more power to the people.